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July 2004
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September 2004

Virginia Legislature Acts to Clarify Lien Rights of Employer in Third Party Actions

This is courtesy of my partner, John H. Carstens, who is also our firm's managing partner:

In 2003, the Supreme Court of Virginia held that the employer did not timely protect its subrogation rights in a third party action, where its petition was filed after a settlement was reached but prior to the entry of the final order. See Yellow Freight Systems v. Courtaulds Performance Films, Inc, 266 Va. 57, 580 S.E.2d 812 (2003). While the Supreme Court acknowledged that the petition had been filed prior to verdict as required by the statute, as it then existed, the Court found that the subrogation rights had been extinguished by virtue of the settlement. As a result, the employer had no enforceable right at the time it filed its petition and the trial court could not consider it.

Effective July 1, 2004, the Virginia legislature amended the subrogation provisions of the Virginia Workers’ Compensation Act to address the anomaly created by the Courtaulds decision. The statute now provides that the employer shall have a lien against any verdict or settlement. Va. Code § 65.2-309(A). See also, Va. Code §§ 65.2-309.1, 310 and 311. The statute expressly gives the employer, whose lien has not been satisfied, a right to recover against the person receiving the proceeds of the settlement or verdict either through a civil action, or as a credit against future compensation. Va. Code § 65.2-309(D). These rights are extended to the workers’ compensation carrier by Va. Code § 65.2-812.

Plesae contact John Carstens at our Virginia office for further information.

Violation of Immigration Laws

An alien's use of a false identity when working or obtaining employment in the United States is a violation of federal immigration laws, amounting to a criminal fraud. Hoffman Plastic Compounds, Inc. v. NLRB, 122 S.Ct. 1275, 1283-84 (2002). Even if a claim of a plaintiff who was working in violation of federal immigration laws has merit, the immigration law violations may disqualify such a plaintiff from any recovery. Permitting such a plaintiff to recover would be contrary to federal immigrtation law because it would reward their unlawful conduct and encourage future violations of the immigration laws. Hoffman, 122 S.Ct. at 1283-84.

Later: However, that argument has not succeeded in at least one jurisdiction, Massachusetts, which has refused to deny workers' compensation benefits to an undocumented immigrant worker. See the very interesting opinion in Guillermo Medellin v. Cashman, KPA and National Union Fire Ins. Co. (Reviewing Board of the Department of Industrial Accidents of Massachusetts, Dec. 23, 2003). The latter opinion has been appealed.

The National Immigration Law Center has collected cites to decisions applying Hoffman Plastic:
Immigrants Employment Rights and Remedies